December 22, 2014

Raizen Plans to build Eight Cellulosic Ethanol Facilities in Brazil

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Virtually all the ethanol produced in the world today is from either sugarcane or grain crops, primarily corn. Critics of the industry contend that using food crops to produce fuel leads to higher food prices around the world, although that contention is still a matter of debate. A solution to this food vs. fuel dispute is the production of ethanol from cellulose or what is called second generation ethanol.

Second generation ethanol is ethanol made from cellulose found in plant residue or wood products instead of sucrose or starch found in sugarcane or grains. While cellulosic ethanol holds promise for the long term future, it has been slow to develop commercially. The promise of cellulosic ethanol may now be closer to reality with the construction of a commercial cellulosic ethanol facility in Brazil.

The Brazilian company Raizen completed construction of its first cellulosic ethanol plant in November where the ethanol will be produced from sugarcane residue. The company invested R$ 237 million in the plant that will produce 40 million liters of ethanol from sugarcane residue. The plant is located in the city of Piracicaba in the state of Sao Paulo and right next door to one of Raizen's sugar mills that makes sugar and ethanol from sugarcane.

The sugarcane residue from the sugar mill is currently being burned to generate electricity to run the mill with the excess electricity sold back into the electrical grid. The company is now going to divert some of the sugarcane residue to its new facility to produce ethanol. The company feels there are a lot of saving and synergies by placing both plants next door to each other.

Since 2012, Raizen has been working with the Canadian company Iogen Corporation to develop the technology necessary to use sugarcane residue to make ethanol. In order to conduct the necessary research, Raizon sent 1,000 tons of sugarcane residue to Iogen's facilities in Ottawa Canada. The two companies have now formed a joint venture, Iogen Energy, where they each hold a 50% stake in the company.

Part of the difficulty in making second generation ethanol is the cost of the enzymes necessary to transform the cellulose into ethanol and those enzymes are furnished to Iogen Energy by Novozymes.

Raizen is estimating that their company-wide ethanol production will increase 50% by producing second generation ethanol. The company has plans to construct seven more cellulose ethanol plants in Brazil by 2024. All of the facilities will be built next door to their existing first generation ethanol plants that use sugarcane. All the new plants combined could produce up to one billion liters of cellulosic ethanol.